Some small business owners are still falling foul of the ATO’s superannuation and tax regulations.

It’s important to understand your super obligations as well as employer SGC requirements – so below is a short refresher.

I also include a few other pointers that may help with preparing your business and your employees for complying with ATO regulations in the year ahead.

Employers’ superannuation obligations

Employers are required to pay 9.5% super contributions for employees who earn more than $450 before tax in a month.

The contributions need to be paid to a compliant super fund within 28 days of the end of each quarter – as indicated in the following examples:

September quarter         by           28th October

December quarter          by           28th January

March quarter                 by           28th April

June quarter                   by           28th July

If the contributions are not paid on time you will become liable to the superannuation guarantee charge (SGC).

Work-related deductions: clothing & laundry

In an address to the National Press Club, the Commissioner of Taxation advised that the ATO will increase its focus on work-related expenses.

The ATO has seen claims for clothing and laundry increase over the last five years and Assistant Commissioner Kath Anderson advised that it will use data matching and tracking to focus on specific items.

Ms Anderson also debunked the myth that you can claim a standard deduction of $150 without spending any money.  There are 1.6 million taxpayers claiming exactly $150, and the ATO will use random audits to check that these are valid claims.

Employees claiming car expenses

For the 2017 tax return, employees have two methods available to claim for work-related car use.

  • Costs per km
  • Log book

The costs per km is the simplest method but it is limited to 5000km.  You will need to be able to verify the distance claimed and the amount you can claim is $0.66 per km.

For the log book method, the record-keeping obligations are much more stringent. You will need a compliant log book and a record of all your car expenses. A compliant log book is valid for five years and is required to include the following information:

  • Date of trip
  • Odometer recording at the start and end of the trip
  • Distance travelled for each trip
  • The reason for the trip

The log book is also required to have been completed at the time of the trip.

Any queries about the issues raised above? Call me on  (02) 9957 3233 and I’d be happy to help out.